More on my fiction writing

March 25, 2009

Has Obama already sold out?

The stock market is a leading indicator. I fear the recent "Obama rally" (such as it is) is telling us that the president has made peace with the financial barons that brought us to the abyss. He will throw crumbs to average Americans while shoveling trillions into the corrupt system so thoroughly outed by Matt Taibbi's essential-reading article in Rolling Stone. The barons, through their henchmen Tim Geithner and Larry Summers, have assured Obama that they can right the system and have average Americans back on their feet (i.e., create another bubble). The coup of the economic royalists -- they really more resemble Third World kleptocrats than the moguls who opposed FDR -- may have happened long ago. And Obama has no choice but to go along.

Or so he may think. Meanwhile, the cheap rage over AIG seems to be abating. But where's the rage over FedEx threatening to cancel a big order from Boeing if its workers are more easily allowed to join a union? Where's the outrage over Arlen Specter's defection on the Employee Free Choice Act -- dooming it -- because he fears an ultra-reactionary primary opponent? The disconnect between unions and the majority of working Americans continues. Neither labor nor liberal Democrats can find the compelling language to reach them, or to take the debate from the sterile ground it has occupied for years. And how to match the huge war chests of a corporate American that wants its workers cheap, pliable and hating organized labor?

Thus, the average duh and igno can bluster against AIG while watching Fox News, listening to right-wing talk radio and blaming government for his falling living standard. Probably the majority of Americans are just too baffled by the discontinuity facing them, too emotionally limited to look for more than "optimism," however illusory and temporary, and too into their distracting material worlds, to realize the stakes and act. At the moment, Obama and the Dow comfort them. Now, gotta pick up the kids from their play date.

A new report from the Government Accountability Office shows why working people might want to join a union. It details a list of horrific labor-law violations, and the lack of enforcement by the federal government. Not surprisingly, these often hit the most vulnerable, low-wage workers in our loudly self-proclaimed "Christian nation." But it's not just minimum-wage people affected by the class-warfare against average Americans.

What happened to your pension? It went away in most cases, replaced by a 401(k) that was thrown into a speculative stock market filled with swindles. Those pensions left were often mismanaged by the companies -- and this is money being paid in by employees -- or simply abrogated by the cozy bankruptcy laws.

What happened to your health benefits? Slowly eroded, with more cost to you -- if you're lucky enough to have them at all. Most of those small-businessmen that the reactionaries lionize like Heroes of Soviet Entrepreneurship don't pay to insure their workers. They, and even some very big companies, happily pass you along to the miserly public health system, which itself is facing draconian cutbacks. Well, we wouldn't want "socialized medicine," right? We have the best health care in the world, right?

What happened to your wages? They've been struggling since 1980 and have stagnated since 2001 -- so with inflation, you're probably had a pay cut. This was merely cloaked by the housing bubble, the proliferation of home-equity lines of credit, and the explosion of credit-card debt. The money flowed to investors -- so you thought you'd be a day trader, a house flipper... Now the harsh truth arrives. The oligarchs' interests are violently at odds with yours. But you still hate those damned auto workers...

You say you'd rather take your chance on your own, because you've been lucky so far. Unfortunately, the good positions keep declining, in part because of the merger-machine that has fueled huge income for Wall Street while destroying millions of jobs. Others have been sent overseas in ill-conceived trade deals. And all those housing-related jobs -- where even my church organist had a real-estate license (such was Phoenix) -- poof...

As all of this has been happening, the pay of top executives has reached historic, astronomical levels. For that compensation, many of them were building unsustainable businesses dependent on cheap labor and "financial services " -- and in many cases they were committing outright financial fraud. This is in contrast to their far-less compensated predecessors in the 1950s and 1960s, who operated corporations that made real products, paid good wages and helped sustain the greatest middle class in the history of the world. As all this was happening, the transnational financial kleptocracy -- answerable to no government -- was taking over your government. With them, the shadow banking system and the cohort of the wealthy that prospered from giving the middle class years of haircuts to create historic income inequality and loss of economic mobility.

Unions arose in the industrial revolution because individuals -- even the highly skilled tradesman -- were no match for the power of the corporation. Progressive government by both parties early in the 20th century sought to provide a counterweight to these powerful "trusts" -- work that continued in the heyday of liberalism. But the oligarchs never gave up power without a fight. Now they whine because of ineffectual protests against AIG bonuses. What would they do if thousands of their workers staged a sit-down strike, one of the tactics used to create the modern labor movement?

Maybe Obama can do his gradualist shuffle. Get the economy off life support. Put in place serious regulation. Start to shift the balance back a little toward the majority of Americans. Even those goals now seem impossibly ambitious, especially given his budget's uncertain fate in an obstructionist Senate. Then it will be time for the mid-term elections and the timid Democrats' fleeting moment will have passed.

It may not matter. The long-simmering crises facing the country have slipped the leash. We're living through only the first act of the Great Disruption. Neither Wall Street nor the military-industrial complex can deliver a fix for Obama in exchange for being left alone. So any cease-fire he's called with them is really beside the point. Meanwhile, America motors on, clueless -- but it's all the fault of those lazy union workers, right. Right?

I have a friend (hey, Doug!) who disagrees with me about what constitutes America's failing social compact. Obviously it is more complicated than any one theory but I think you can see the broad outlines of this decline starting in the early Culture War (late 60s) and gaining steam through the Reagan Apotheosis, before settling into the trench warfare of the Clinton-Bush Era of Bad Feelings. It's the idea that there are real Americans and not-so real Americans (minorities, specifically). The "real" Americans saw themselves not in any class alliance but in a racial and cultural union with the upper-middle class. Hence, it was very easy to manipulate them with emotional rhetoric. Identification with the economic interests of their bosses became, paradoxically, their way of politically protesting the very anxieties created by the economic and fiscal policies of their fantasy protectorate. It's the Stockholm Syndrome by way of Dogpatch.

The reason America has such a weak Left is this disunion between cultural and political identity. Even today, the most vocal defenders of the rights of plutocracy come from the lumpenproletariat of talk radio.

Given the economic meltdown we're facing, populism has two likely ways to express itself. One would be, in a post-Weimar way, manifesting the overarching ideal of country, race and religion. The other would be in terms of economic interests. My suspicion is that in times of stress, there's a strong reversion to primordial tribal identity. In this vein, it would be very tempting for a White Knight to promise a restoration of the dominant tribe's privileges and well-being.

The problem with this scenario is America's rapidly shifting demographics. The white/Christian identity movement is facing raw numerical decline. So, does that mean "we" win? Don't be so sure. In a worsening economic situation, the very social fabric that allows political alliances might be frayed beyond repair. If that's the case, the right will win not by argument but by economic muscle. Or you could look at it this way: we're all Scottsdalians, now. So to speak, of course.

Majority sign-up (card check) has been legal since the National Labor Relations Act was passed in 1935. The problem is that recognition of majority card-check votes by employers is currently voluntary; furthermore, unlike a real secret ballot, the phony variety forced upon workers by employers permits all manner of intimidation -- by employers -- to influence the outcome of the vote.

The AFL-CIO notes that "People call the current National Labor Relations Board (NLRB) election system a secret ballot election—but in fact it's not like any democratic election held anywhere else in our society. It's really a management-controlled election process because corporations have all the power. They control the information workers can receive and routinely poison the process by intimidating, harassing, coercing and even firing people who try to organize unions. No employee has free choice after being browbeaten by a supervisor to oppose the union or being told they may lose their job and livelihood if workers vote for the union."

Representative George Miller (D-CA), chairman of the House Committee on Education and Labor, stated:

"The current process for forming unions is badly broken and so skewed in favor of those who oppose unions, that workers must literally risk their jobs in order to form a union. Although it is illegal, one quarter of employers facing an organizing drive have been found to fire at least one worker who supports a union. In fact, employees who are active union supporters have a one-in-five chance of being fired for legal union activities. Sadly, many employers resort to spying, threats, intimidation, harassment and other illegal activity in their campaigns to oppose unions. The penalty for illegal activity, including firing workers for engaging in protected activity, is so weak that it does little to deter law breakers.

"Even when employers don't break the law, the process itself stacks the deck against union supporters. The employer has all the power; they control the information workers can receive, can force workers to attend anti-union meetings during work hours, can force workers to meet with supervisors who deliver anti-union messages, and can even imply that the business will close if the union wins. Union supporters' access to employees, on the other hand, is heavily restricted."

The U.S. House Committee on Education & Labor reported that the overall purpose of the Employee Free Choice Act is "allowing employees to make their own decision about whether they want to bargain together—to advocate for fairer wages, benefits and working conditions—without the threat or fear of harassment and retribution and fear of losing their livelihood."

Human Rights Watch has reported that, at present, "a culture of near-impunity has taken shape in much of U.S. labor law and practice. Any employer intent on resisting workers' self-organization can drag out legal proceedings for years, fearing little more than an order to post a written notice in the workplace promising not to repeat unlawful conduct. Many employers have come to view remedies like back pay for workers fired because of union activity as routine costs of doing business, well worth it to get rid of organizing leaders and derail workers' organizing efforts."

In a recent investigation by the U.S. General Accounting Office, GAO investigators posed as workers complaining that their employer cheated them of overtime pay or committed other labor law violations, in submitting complaints to the U.S. Department of Labor for investigation.

The results: 9 out of 10 complaints were "bungled" by the Labor Department.

"Half the complaints [including one involving children operating heavy machinery at a meat packing plant] were never even recorded in a database, as required, and two of the 10 were marked as successfully paid even though the fictitious workers reported they had not been paid..."

The stock market is a coincident indicator, of systematic liquidity. That being the amount of money available to speculate in stocks. The stock market does not 'discount' the future or anything. It has no mystical ability to see the future or grok the zeitgeist.

Many trillions of dollars have been injected into the financial sphere worldwide by Treasuries and central banks. US and Euro stocks have risen as a result.

The post WWII history of stocks being ahead of the business cycle to the down and upside is explained by the credit cycle.